Reading A Market

Read All About It

McGee began spending evenings at the library saturating herself with book-industry research. "When I did my research, I saw both ends of the spectrum," she says. "I saw the totally focused bookstore that has just mysteries or just feminine titles or just ethnic titles. And at the other end was the superstore, all 70,000 square feet of it with 200,000-plus titles. What I was looking at was that point in the middle."

McGee envisioned a "neighborhood" superstore that would target the multicultural market. Despite an apparent lack of family reading time, the statistics pointed to a viable niche: African Americans were spending more than $300 million annually on books. She knew that by devoting her selection to multicultural titles, she could offer a wider array than the multicultural sections of bigger bookstores could.

With the help of a local Small Business Development Center, McGee added some finishing touches to her business plan. Then the search for start-up financing was on. "[Several] bankers turned me down flat without even reading my business plan," she says.

McGee had no luck until the vice president of small-business loans at Comerica Bank in Detroit helped her find her way. "She believed in what I was trying to do as much as I did," says McGee. "[She pointed to] my background in business, my personal credit history, my career track record and my MBA, and told the [loan] committee that if anybody could make this store happen, I had the best chance."

Another boost to her financing appeal was the prime location McGee found in a newer strip mall anchored by a thriving supermarket. Located in a "healthy income" area, the 3,500-square-foot space was perfect. The best part? There wasn't another bookstore for miles around.

"Other [businesses] wanted the same location," says McGee, a fact which quickly became a motivation to get her financing pushed through. The company that owned the space liked McGee's community-bookstore concept so much that its CFO gave her a written commitment that the company would hold the location until her start-up financing came through, turning away larger, established businesses in the process. "I'm sure they lost a great deal of rent doing that, but they thought it was a good cause," says McGee.

With the location set, the financing came through shortly thereafter. McGee had secured backing from the SBA and leveraged the equity in her home to get the $250,000 in start-up money she needed from Comerica. Now it was time to put her plan in motion.

When Christmas 1996 rolled around, McGee proudly opened the doors of Apple Book Center, boasting 10,000 multicultural titles. Thanks to a publicity drive, more than a dozen articles about Apple Book Center appeared in local publications during its first few months of business. Radio and cable-TV spots, as well as direct-mail ads, helped spread the word.

The new store on the block created quite a stir, but sales growth was slow. By September 1997, McGee faced serious cash-flow issues. Significant sales volume remained a fantasy. "From the first day we were open, I'd been eating up my working capital," remembers McGee. "With the level of sales [we had in September], I knew I'd be out of cash in a month."

Although she knew she could go back to Comerica for additional funds, McGee committed herself to not putting another borrowed dime into the store. "I was determined that enough money had been put into Apple Book Center that it was going to have to make it on its own," she says. So she took the remaining cash in her checking account--roughly $10,000--and launched a do-or-die advertising campaign, with heavy emphasis on a local radio station whose primary audience was Apple Book Center's largest target market: women over 25. Says McGee, "I put [the whole sum] into advertising. I just rolled the dice on the whole square."

Like this article? Get this issue right now on iPad, Nook or Kindle Fire.

This article was originally published in the July 1999 print edition of Entrepreneur with the headline: Reading A Market.

Loading the player ...

3 Keys to Getting Better, More Restful Sleep

Ads by Google

Share Your Thoughts

Connect with Entrepreneur

Most Shared Stories